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Uniswap Founder Blasts Citadel for Urging SEC to Treat DeFi Like Wall Street

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Uniswap founder Hayden Adams has accused Citadel Securities of attempting to pull decentralized finance into the identical regulatory field as Wall Street, after the market maker urged the US SEC to deal with DeFi protocols and their builders as conventional intermediaries.

Adams fired off a publish on X that rapidly made the rounds in crypto circles.

“First Ken Griffin screwed over Constitution DAO,” he wrote, earlier than including, “Now he’s coming for DeFi, asking the SEC to deal with software program builders of decentralized protocols like centralized intermediaries.”

He linked immediately to Citadel’s submission to the SEC and added, “Bet Citadel has been lobbying behind closed doorways on this for years.”

Adams Ridicules Citadel’s Claim That DeFi Lacks Fair Access

He saved his sharpest line for a selected passage within the submitting.

Adams pointed to Citadel’s declare that DeFi can’t present “truthful entry” to markets and responded, “Okay thats all fairly unhealthy, however the precise nerve for one in every of their arguments to be that there isn’t a manner for DeFi protocols to present ‘truthful entry’ of all issues lmao.”

He then wrote, “Makes sense the king of shady tradfi market makers doesn’t like open supply, peer-to-peer tech that may decrease the barrier to liquidity creation.”

The conflict stems from a prolonged letter Citadel Securities despatched to the SEC on tokenized equities and DeFi buying and selling venues. In that doc, the agency tells regulators that many so-called decentralized techniques deliver collectively consumers and sellers in a coordinated manner and subsequently match present authorized definitions of exchanges and dealer sellers.

It argues that actions in DeFi shouldn’t obtain lighter therapy just because they’re applied in code on a blockchain.

Firm Rejects Idea That Open Protocols Should Avoid Intermediary Rules

Citadel goes additional and lists a variety of gamers within the DeFi stack, from buying and selling interfaces and sensible contract builders to validators and liquidity suppliers. According to the submitting, many of those actors take transaction-based charges or affect how orders are routed, which, in Citadel’s view, typically makes them functionally comparable to regulated monetary intermediaries.

The agency urges the SEC to apply a technology-neutral strategy in order that the identical exercise attracts the identical guidelines no matter whether or not it runs via an identical engine or a wise contract.

A central concern within the letter is tokenized shares. Citadel warns that permitting tokenized shares of US corporations to commerce freely on DeFi protocols would create what it describes as a shadow fairness market outdoors the nationwide market system. It says such a construction might fragment liquidity and bypass the reporting, surveillance and investor safety framework that presently governs equities.

The agency additionally resists calls from some crypto business teams for broad exemptions. Several DeFi advocates have requested the SEC to recognise that open supply protocols and validator units don’t function like conventional intermediaries and shouldn’t have to register as exchanges or dealer sellers.

Crypto Devs Fear Wall Street Rules Would Stifle Permissionless Innovation

Citadel counters that the company lacks authority to carve out a separate regime for tokenized equities and argues that any elementary change to how US shares commerce belongs with Congress.

If regulators settle for Citadel’s framing, protocol groups, front-end operators, routing wallets, market makers and presumably even DAO individuals might face registration, capital guidelines and finest execution duties that had been designed for broker-dealers.

Many in crypto see that final result as incompatible with international, permissionless software program that may be deployed by small groups and maintained by distributed communities.

Adams framed the episode as a part of an extended story. In his publish, he reminded followers that Citadel founder Ken Griffin outbid ConstitutionDAO at a Sotheby’s public sale in 2021, thwarting the crypto collective’s try to purchase a uncommon copy of the US Constitution.

By opening his thread with “First Ken Griffin screwed over Constitution DAO,” then pivoting straight into the SEC struggle, he linked that high-profile conflict with Citadel’s newest transfer in Washington.

The publish Uniswap Founder Blasts Citadel for Urging SEC to Treat DeFi Like Wall Street appeared first on Cryptonews.

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